Miguel Leite FollowCo-founder and CEO of Coinvision. +8 years experience in tech and blockchain startups. In crypto for the tech.

10. Cryptocurrency Storage: Cold Storage and Hardware wallets

February 8, 2019 1 min read

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Now that you know about online and desktop wallets, let’s talk about what what steps you can take to further insure the safety of your tokens.

Hardware wallets

As the name indicates, hardware wallets are physical objects (read pen-drives), that are encrypted and protected by multiple security protocols that you can use to secure your assets. They allow you to keep your assets offline, preventing any attempt of hacking. To set up any of these wallets, the user will need to create a pin code for the machine and a written down seed-phrase, which should be copied several times and stored in different locations (the seed phrase is the last line of defense in case the wallet gets damaged or lost). There are two overwhelmingly dominant providers of hardware wallets in the market today:

The Nano X is produced by French startup ledger and is one of the most beloved hardware wallets out there. It resembles a pen drive and features an OLED interface screen that makes its easy to interact with the machine, through the two buttons on its side. It is batteryless, so it only works when connected to a device, be it a computer or a mobile phone. Of all hardware wallets, it supports the biggest amount of cryptocurrencies, including any ERC-20 token on the Ethereum Blockchain. The price tag is around one hundred euros.

Trezor is another very well trusted hardware wallet. It was the first ever secure crypto hardware wallet in the market and it also operates with an OLED interface, although it resembles a small calculator rather than a USB. It provides a randomly generated 9 digit pin and a 24-word recovery seed. It only supports 10 different cryptos, including ERC-20, so it falls bit in performance when compared to Ledger, but it also costs around ten euros less. Either of the two is sure to satisfy your needs though.

Cold Storage

If you are holding Bitcoin and other currencies but are not trading and in fact made an investment for the long-run, then you might consider cold storage, also known as a paper wallet.

This is the safest known way for you to store your cryptos without the fear of being hacked. All you have to do is get your cryptos, a printer, and a crypto wallet that can read QR codes.

1 – Find a paper wallet generator website. [Bitcoin.com] (https://tools.bitcoin.com/paper-wallet/) or Bitcoinpaperwallet.com (https://bitcoinpaperwallet.com/bitcoinpaperwallet/generate-wallet.html) are good resources for either BTC or BCH, but there are many more.

2 – The page has a randomness generating bar. Move your mouse around the screen to generate randomness until the bar reaches 100%.

3 – The generator will produce a paper wallet with a public and private key that you can now print and send Bitcoin to.

4 – You can add a BIP38 passphrase for extra security.

Once printed, your Bitcoins can be securely stored in a vault or any safe location. You can also use the paper wallet to pay in Bitcoin the same way you pay in hard cash, as whoever has access to the private key can access the funds.

And there you go. These are the ultimate safest ways for you to store your cryptos.